BlackRock’s head of digital assets, Robbie Mitchnick, has argued that Bitcoin has been wrongly labeled as a “risk-on” asset. He believes that some crypto research publications have mistakenly extrapolated the riskiness of Bitcoin to classify it as a risk-on asset that should trade like equities. Mitchnick contends that the drivers of Bitcoin are fundamentally different from those of equities and other risk assets, and in some cases, they may even be inverted. BlackRock’s recent Bitcoin white paper describes Bitcoin as a “unique diversifier” that can act as a hedge against monetary and geopolitical risks.
A risk-on asset typically refers to investments that perform well during favorable economic conditions, such as equities, commodities, and certain cryptocurrencies. On the other hand, risk-off assets are investments that perform well during periods of market uncertainty or economic downturns, such as gold, government bonds, and the US dollar.
Mitchnick points out that only a few events each year actually impact the fundamental value of Bitcoin. BlackRock currently offers the iShares Bitcoin Trust (IBIT), a regulated investment vehicle that allows investors to directly invest in Bitcoin.
Regarding a recent amendment to the Bitcoin ETF that requires withdrawals within 12 hours from Coinbase, Mitchnick downplayed its significance. He stated that it is a normal course update to optimize the operational models of the crypto ETFs.
In another development, crypto analyst PlanB has proposed a scenario in which Bitcoin could reach over $1 million by the end of 2025. This prediction is based on the assumption that Trump would win the election in November, ending the “war on crypto” and driving Bitcoin to a high of $100,000. According to PlanB, by January 2025, crypto companies would return to the US, pushing Bitcoin to $200,000. In April, Trump would start building a strategic Bitcoin reserve, causing the currency to hit $400,000. Finally, a period of “face-melting FOMO” between July and December would drive Bitcoin to $1 million.
While some commenters expressed skepticism about this scenario, it remains to be seen how Bitcoin’s value will evolve in the coming years.